恒泰裕集团(08081) - 2025 - 中期财报

GEM Characteristics and Disclaimers This report outlines the GEM market's high investment risks for small and medium-sized companies, with the Board of Directors assuming full responsibility for its content - The GEM market, designed for small and medium-sized companies, entails higher investment risks and potential for significant market volatility with no guaranteed high liquidity[4][5] - Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited disclaim responsibility for the report's content, accuracy, completeness, and any resulting losses[6] - The Board of Directors, collectively and individually, assumes full responsibility for the accuracy, completeness, and non-misleading nature of the report's information[7] INTERIM RESULTS This section presents the unaudited condensed consolidated interim results for the six months ended June 30, 2025, showing a narrowed loss but a net decrease in cash and cash equivalents Unaudited Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2025, the Group's revenue from continuing operations decreased, but the loss for the period narrowed due to reduced administrative expenses and gains from financial asset disposal Loss and Other Comprehensive Income Key Data (For the six months ended June 30) | Indicator | 2025 (thousand HKD) | 2024 (thousand HKD) | Change | | :--- | :--- | :--- | :--- | | Revenue | 34,502 | 38,071 | -9.4% | | Cost of sales | (5,595) | (5,577) | +0.3% | | Other income and gains or losses | 2,596 | 1,474 | +76.1% | | Administrative expenses | (37,123) | (41,272) | -10.1% | | Loss on disposal of an associate | (2,590) | – | N/A | | Gain/(loss) on disposal of financial assets at fair value through profit or loss | 2,314 | (87) | Significant improvement | | Net fair value loss on financial assets at fair value through profit or loss | (2,819) | (3,714) | -24.1% | | Share of results of associates | (6,216) | (9,305) | -33.1% | | Finance costs | (4,362) | (3,157) | +38.2% | | Loss before tax | (19,232) | (23,643) | -18.7% | | Loss for the period | (19,232) | (23,712) | -18.9% | | Basic and diluted loss per share (HK cents) | (0.37) | (0.46) | -19.6% | - Loss for the period significantly narrowed by 18.9%, primarily due to a 10.1% reduction in administrative expenses and a shift from loss to gain on financial assets at fair value through profit or loss[13][101] - Revenue from continuing operations decreased by 9.4% year-on-year, from 38,071 thousand HKD to 34,502 thousand HKD[13][101] Unaudited Condensed Consolidated Statement of Financial Position As of June 30, 2025, total assets and net assets decreased, with a significant reduction in cash and cash equivalents compared to the end of 2024 Financial Position Key Data (As of June 30) | Indicator | 2025 (thousand HKD) | 2024 (thousand HKD) | Change | | :--- | :--- | :--- | :--- | | Non-current assets | | | | | Property, plant and equipment | 172,866 | 167,922 | +2.9% | | Investments in associates | 37,681 | 52,511 | -28.2% | | Total non-current assets | 212,197 | 222,161 | -4.4% | | Current assets | | | | | Inventories | 5,771 | 3,712 | +55.5% | | Trade receivables, loan and interest receivables | 45,873 | 41,455 | +10.7% | | Financial assets at fair value through profit or loss | 29,546 | 36,167 | -18.2% | | Cash and cash equivalents | 1,812 | 10,987 | -83.5% | | Total current assets | 139,422 | 147,248 | -5.4% | | Current liabilities | | | | | Contract liabilities | 9,002 | 9,076 | -0.8% | | Trade and other payables, accruals and provisions | 32,237 | 33,131 | -2.7% | | Interest-bearing bank and other borrowings | 97,761 | 95,546 | +2.3% | | Total current liabilities | 139,312 | 138,521 | +0.6% | | Non-current liabilities | | | | | Interest-bearing bank and other borrowings | 4,627 | 7,545 | -38.7% | | Total non-current liabilities | 4,881 | 7,616 | -35.9% | | Net assets | 207,426 | 223,272 | -7.1% | - Cash and cash equivalents significantly decreased by 83.5%, from 10,987 thousand HKD at the end of 2024 to 1,812 thousand HKD[17] - The Group's total assets decreased from 369,409 thousand HKD at the end of 2024 to 351,619 thousand HKD as of June 30, 2025[32] Unaudited Condensed Consolidated Statement of Changes in Equity Total equity attributable to owners of the Company decreased from January 1, 2025, to June 30, 2025, primarily due to the loss for the period, partially offset by exchange differences Equity Changes Key Data (For the six months ended June 30) | Indicator | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Equity at beginning of period (attributable to owners of the Company) | 223,276 | 317,506 | | Loss for the period (attributable to owners of the Company) | (19,236) | (23,672) | | Exchange differences arising from translation of financial statements of overseas subsidiaries | 3,388 | (1,369) | | Fair value loss on financial assets at fair value through other comprehensive income | (2) | (503) | | Equity at end of period (attributable to owners of the Company) | 207,426 | 291,962 | - As of June 30, 2025, total equity attributable to owners of the Company was 207,426 thousand HKD, a decrease from 223,276 thousand HKD as of January 1, 2025[20][136] - Exchange differences generated 3,388 thousand HKD in other comprehensive income during the period, compared to a loss of 1,367 thousand HKD in the prior corresponding period[14][20] Unaudited Condensed Consolidated Statement of Cash Flows For the six months ended June 30, 2025, operating cash flow turned to an outflow, investment cash flow turned to an inflow, and financing cash flow was an outflow, leading to a significant net decrease in cash Cash Flow Key Data (For the six months ended June 30) | Indicator | 2025 (thousand HKD) | 2024 (thousand HKD) | Change | | :--- | :--- | :--- | :--- | | Net cash flows (used in)/from operating activities | (3,460) | 6,361 | Turned from inflow to outflow | | Net cash flows from/(used in) investing activities | 269 | (15,298) | Turned from outflow to inflow | | Net cash flows (used in)/from financing activities | (6,055) | 3,832 | Turned from inflow to outflow | | Net decrease in cash and cash equivalents | (9,246) | (5,105) | Decrease widened | | Cash and cash equivalents at end of period | 1,812 | 1,435 | +26.3% | - Net cash flow from operating activities turned from an inflow of 6,361 thousand HKD in the prior corresponding period of 2024 to an outflow of 3,460 thousand HKD in 2025[23] - Net cash flow from investing activities turned from an outflow of 15,298 thousand HKD in the prior corresponding period of 2024 to an inflow of 269 thousand HKD in 2025[23] NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS This section details the basis of financial statement preparation, adoption of new HKFRSs, operating segment information, revenue, loss before tax, income tax, dividends, EPS, PPE, financial investments, receivables, contract liabilities, payables, borrowings, convertible loans, share capital, share option scheme, and related party transactions 1. BASIS OF PREPARATION The unaudited condensed consolidated financial statements are prepared in accordance with HKFRSs and HKAS 34, with consistent accounting policies as the 2024 annual financial statements - The financial statements are prepared in accordance with Hong Kong Financial Reporting Standards (HKFRSs) and Hong Kong Accounting Standard 34 "Interim Financial Reporting"[24][27] - The principal accounting policies are consistent with those adopted in the audited annual financial statements for the year ended December 31, 2024[24][27] 2. ADOPTION OF NEW AND REVISED HONG KONG FINANCIAL REPORTING STANDARDS The Group adopted new and revised HKFRSs effective from January 1, 2025, with directors expecting no significant impact on the condensed consolidated financial statements - The Group has applied several new and revised Hong Kong Financial Reporting Standards that are mandatorily effective for annual periods beginning on or after January 1, 2025[25][28] - The directors anticipate that the application of these amendments will not have a significant impact on the Group's condensed consolidated financial statements[25][28] 3. OPERATING SEGMENT INFORMATION The Group operates three continuing business segments: Australian hospitality, money lending, and asset investment, with a network media business terminated after an associate disposal - The Group's continuing operations segments include: (i) Australian hospitality and related services; (ii) money lending business; and (iii) asset investment business[33][35] - The business of providing services through network media was discontinued following the disposal of the associate, Dynamic Indonesia Holdings Limited, on August 30, 2024[31][32] Segment Revenue and Results (For the six months ended June 30) | Segment | 2025 Revenue (thousand HKD) | 2024 Revenue (thousand HKD) | 2025 Results (thousand HKD) | 2024 Results (thousand HKD) | | :--- | :--- | :--- | :--- | :--- | | Australian hospitality and related services | 31,943 | 32,958 | 1,163 | (1,620) | | Money lending business | 2,559 | 5,113 | (2,756) | 194 | | Asset investment business | – | – | (10,066) | (12,423) | | Total continuing operations | 34,502 | 38,071 | (11,659) | (13,918) | | Discontinued operations (network media) | – | 1 | – | (69) | 4. REVENUE, OTHER INCOME AND GAINS Group revenue, primarily from Australian hospitality and loan interest, decreased by 9.4% to 34,502 thousand HKD, while other income and gains significantly increased Revenue and Other Income Composition (For the six months ended June 30) | Revenue Source | 2025 (thousand HKD) | 2024 (thousand HKD) | Change | | :--- | :--- | :--- | :--- | | Provision of hospitality and related services | 12,947 | 13,525 | -4.27% | | Sales of food and beverages from hotel business | 18,996 | 19,433 | -2.25% | | Total revenue from contracts with customers | 31,943 | 32,958 | -3.08% | | Loan interest income | 2,559 | 5,113 | -49.95% | | Total revenue from continuing operations | 34,502 | 38,071 | -9.38% | | Other income and gains or losses | 2,596 | 1,474 | +76.12% | - Loan interest income significantly decreased by 49.95% year-on-year, from 5,113 thousand HKD to 2,559 thousand HKD[43] 5. LOSS BEFORE TAX Loss before tax for the period narrowed to 19,232 thousand HKD, driven by reduced staff costs, depreciation, and increased gains from financial asset disposal Loss Before Tax Components (For the six months ended June 30) | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | Change | | :--- | :--- | :--- | :--- | | Cost of inventories sold | 5,505 | 5,255 | +4.76% | | Cost of services provided | 90 | 322 | -72.05% | | Staff costs | 20,389 | 19,830 | +2.82% | | Depreciation of property, plant and equipment | 3,670 | 4,346 | -15.55% | | Depreciation of right-of-use assets | 703 | 2,062 | -65.91% | | Reversal of impairment loss/(impairment loss) | 61 | (76) | Turned from loss to reversal | | Gain/(loss) on disposal of financial assets at fair value through profit or loss | 2,314 | (87) | Turned from loss to gain | | Fair value loss on financial assets at fair value through profit or loss | (2,819) | (3,714) | -24.10% | | Loss on disposal of an associate | (2,590) | – | N/A | - Staff costs slightly increased by 2.82% to 20,389 thousand HKD[45] - Total depreciation and amortisation decreased by 31.76%, from 6,408 thousand HKD in the prior corresponding period of 2024 to 4,373 thousand HKD[45] 6. INCOME TAX EXPENSE The Group recorded zero income tax expense for the period, as Hong Kong entities utilized tax losses, and Australian subsidiaries are subject to a 30% tax rate - The Group's entities in Hong Kong had sufficient tax losses brought forward from prior years, resulting in no Hong Kong Profits Tax provision for the current period[47][49] - Australian subsidiaries are subject to a corporate tax rate of 30%[47][49] 7. INTERIM DIVIDEND The Board of Directors does not recommend an interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025[48][50] 8. LOSS PER SHARE Basic and diluted loss per share improved to 0.37 HK cents for continuing and discontinued operations, with no dilutive potential ordinary shares Loss Per Share (For the six months ended June 30) | Indicator | 2025 (HK cents) | 2024 (HK cents) | Change | | :--- | :--- | :--- | :--- | | Basic and diluted loss per share from continuing and discontinued operations | (0.37) | (0.46) | -19.6% | | Basic and diluted loss per share from continuing operations | (0.37) | (0.45) | -17.8% | | Basic and diluted loss per share from discontinued operations | – | (0.01) | N/A | - As of June 30, 2025, there were no potential dilutive ordinary shares outstanding, hence basic and diluted loss per share amounts are not adjusted[54][56] 9. MOVEMENTS IN PROPERTY, PLANT AND EQUIPMENT Additions to property, plant and equipment significantly decreased to 341 thousand HKD for the six months ended June 30, 2025 Property, Plant and Equipment Additions (For the six months ended June 30) | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | Change | | :--- | :--- | :--- | :--- | | Additions to property, plant and equipment | 341 | 15,351 | -97.78% | - Additions to property, plant and equipment decreased significantly by 97.78% year-on-year[55][57] 10. OTHER EQUITY INSTRUMENTS INVESTMENTS The Group's financial asset investments, including listed and unlisted securities, decreased to 29,546 thousand HKD, primarily due to a decline in financial assets at fair value through profit or loss Financial Asset Investment Portfolio (As of June 30) | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | Change | | :--- | :--- | :--- | :--- | | Financial assets at fair value through other comprehensive income (unlisted equity securities) | 1,522 | 1,426 | +6.73% | | Financial assets at fair value through profit or loss (listed equity securities) | 8,968 | 13,420 | -33.17% | | Financial assets at fair value through profit or loss (unlisted investments) | 14,626 | 15,949 | -8.29% | | Financial assets at fair value through profit or loss (unlisted fund investments) | 5,952 | 6,798 | -12.44% | | Total financial assets at fair value through profit or loss | 29,546 | 36,167 | -18.29% | - Listed equity investments primarily include Town Health International Medical Group Limited and Currenc Group Inc., whose fair values have decreased[61] - Unlisted investments primarily represent a 1.89% equity interest in World Biotech Regenerative Medical Group Limited, which includes a profit guarantee[61] 11. ACCOUNTS RECEIVABLE, LOAN AND INTEREST RECEIVABLES Total trade receivables, loan and interest receivables increased to 45,873 thousand HKD, with a notable rise in trade receivables overdue by over three months Trade Receivables, Loan and Interest Receivables (As of June 30) | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | Change | | :--- | :--- | :--- | :--- | | Trade receivables within HKFRS 15 scope | 4,283 | 50 | +8466% | | Loan receivables | 41,812 | 43,343 | -3.49% | | Interest receivables on loans | 1,935 | 280 | +591.07% | | Less: Impairment | (2,157) | (2,218) | -2.75% | | Total | 45,873 | 41,455 | +10.66% | Trade Receivables Ageing Analysis (As of June 30) | Ageing | 2025 (thousand HKD) | 2024 (thousand HKD) | Change | | :--- | :--- | :--- | :--- | | Less than 1 month | 56 | 50 | +12.0% | | 1 to 2 months | 1,664 | – | N/A | | 2 to 3 months | 208 | – | N/A | | Over 3 months | 2,355 | – | N/A | - As of June 30, 2025, trade receivables overdue by over 3 months amounted to 2,355 thousand HKD, with no such amount at the end of 2024[65] - Impairment provision for loan and interest receivables decreased from 2,218 thousand HKD at the end of 2024 to 2,157 thousand HKD[70] 12. CONTRACT LIABILITIES Contract liabilities, mainly deposits received and deferred income, remained stable at 9,002 thousand HKD as of June 30, 2025 Contract Liabilities (As of June 30) | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | Change | | :--- | :--- | :--- | :--- | | Deposits received and deferred income | 9,002 | 9,076 | -0.82% | 13. TRADE AND OTHER PAYABLES, ACCRUALS AND PROVISION Trade and other payables, accruals, and provisions slightly decreased to 32,237 thousand HKD, with trade payables increasing but all now within three months Trade and Other Payables (As of June 30) | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | Change | | :--- | :--- | :--- | :--- | | Trade payables | 6,032 | 4,842 | +24.58% | | Accruals and other payables | 26,205 | 28,289 | -7.37% | | Total | 32,237 | 33,131 | -2.70% | Trade Payables Ageing Analysis (As of June 30) | Ageing | 2025 (thousand HKD) | 2024 (thousand HKD) | Change | | :--- | :--- | :--- | :--- | | Within 3 months | 6,032 | 2,088 | +188.9% | | Over 3 months | – | 2,754 | -100% | - As of June 30, 2025, all trade payables were within 3 months, whereas at the end of 2024, 2,754 thousand HKD were overdue by over 3 months[76] 14. INTEREST-BEARING BANK AND OTHER BORROWINGS Total interest-bearing borrowings slightly decreased to 102,388 thousand HKD, with a shift towards floating-rate debt and an average effective annual interest rate of 7.6% Interest-Bearing Borrowings Composition (As of June 30) | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | Change | | :--- | :--- | :--- | :--- | | Interest-bearing bank borrowings | 77,378 | 72,567 | +6.63% | | Other interest-bearing borrowings | 25,010 | 30,524 | -18.06% | | Total | 102,388 | 103,091 | -0.68% | | Fixed-rate borrowings | 25,164 | 30,740 | -18.14% | | Floating-rate borrowings | 77,224 | 72,351 | +6.74% | | Secured | 77,378 | 72,567 | +6.63% | | Unsecured | 25,010 | 30,524 | -18.06% | Average Effective Annual Interest Rate of Borrowings (As of June 30) | Interest Rate Type | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Fixed-rate borrowings | 9.7% | 10.6% | -0.9% | | Floating-rate borrowings | 6.9% | 7.3% | -0.4% | - Approximately 80% of the borrowings are denominated in Australian Dollars, and 20% in Hong Kong Dollars[32] 15. CONVERTIBLE LOANS AND DERIVATIVE FINANCIAL LIABILITIES As of June 30, 2025, the Group had no remaining convertible loans or derivative financial liabilities, following repayment and reclassification of prior year instruments - As of June 30, 2025, both the liability component and derivative component of convertible loans and derivative financial liabilities were zero[87] - In 2024, approximately 694 thousand HKD of convertible notes were repaid, and the remaining portion was reclassified as other borrowings and derecognised due to significant amendments (extension of maturity date to March 31, 2026, and lapse of conversion option)[83][85][189][191] 16. SHARE CAPITAL As of June 30, 2025, the Company's authorised share capital was 200,000 thousand HKD, with 5,156,035,108 issued and fully paid shares, unchanged from 2024 year-end Share Capital Structure (As of June 30) | Item | Number of Shares | Amount (thousand HKD) | | :--- | :--- | :--- | | Authorised ordinary shares (HKD 0.01 each) | 20,000,000,000 | 200,000 | | Issued and fully paid shares | 5,156,035,108 | 51,560 | - As of June 30, 2025, the issued share capital remained consistent with that at the end of 2024[89] 17. SHARE OPTION SCHEME The share option scheme, adopted in 2020 to incentivize staff, had no outstanding, granted, exercised, cancelled, or lapsed options during the period - The share option scheme was adopted on June 9, 2020, to incentivise or reward eligible participants for their contributions to the Group, and to recruit and retain high-calibre employees[91][92] - As of June 30, 2025, there were no outstanding, granted, exercised, cancelled, or lapsed share options during the reporting period[93] 18. RELATED PARTY TRANSACTIONS The Group engaged in various related party transactions, including rental and medical service payments, loans to associates, interest income and expenses, and administrative service revenue Related Party Transactions (For the six months ended June 30) | Transaction Type | 2025 (thousand HKD) | 2024 (thousand HKD) | Change | | :--- | :--- | :--- | :--- | | Rental expenses paid to related companies | 748 | 1,868 | -59.96% | | Medical service costs paid to related companies | 178 | 218 | -18.35% | | Consulting fees paid to associates | – | 320 | -100% | | Loans provided to associates | 7,439 | 7,439 | 0% | | Interest receivable from associates | 505 | 356 | +41.85% | | Interest income from associates | 74 | 74 | 0% | | Loans from related parties | 4,627 | 3,906 | +18.46% | | Interest paid to related parties | 138 | 95 | +45.26% | | Revenue generated from providing administrative and management services | 617 | – | N/A | - Director Mr. Lawrence Tang provided interest-bearing loans, which constitute a connected transaction under the GEM Listing Rules[99] - Key management personnel remuneration decreased from 1,283 thousand HKD in the prior corresponding period of 2024 to 557 thousand HKD[98] MANAGEMENT DISCUSSION AND ANALYSIS This section reviews the Group's business and financial performance for the six months ended June 30, 2025, analyzing operations and outlining future strategies amidst global economic challenges Business and Financial Review The Group's loss for the period narrowed by 18.9% due to reduced administrative expenses and improved financial asset performance, despite a revenue decline and associate disposal loss - The Group's loss for the period decreased by 18.9%, primarily due to reduced administrative expenses, a shift from loss to gain on disposal of financial assets at fair value through profit or loss, and a decrease in share of losses of associates[101][105] - Revenue decreased by 9.4% from 38,071 thousand HKD in the prior corresponding period of 2024 to 34,502 thousand HKD[101][105] - A loss of 2,590 thousand HKD was incurred from the disposal of an associate in January 2025, with no such item in the prior corresponding period of 2024[101][105] Provision of Hospitality and Related Services in Australia Revenue from Australian hospitality services decreased by 3% to 31,943 thousand HKD, with occupancy rates falling, influenced by global economic challenges and slow international tourism recovery - Hospitality business revenue decreased by 3% to 31,943 thousand HKD, primarily impacted by global economic challenges and slow recovery of international tourism[108][111] - Balgownie's occupancy rate decreased from 74% in the prior corresponding period of 2024 to 69% in 2025[109][112] - Balgownie completed renovation works in October 2024 and launched a "Wine Club" in April 2023, which had approximately 1,300 members as of June 30, 2025[107][110][111][112] Provision of services through network media The network media services business segment was discontinued after the disposal of an associate, resulting in no revenue recorded for the reporting period - The Group has discontinued the business segment of providing services through network media, and no revenue was recorded for the reporting period[113][117] Money Lending Business Interest income from the Hong Kong money lending business decreased by 49.95% to 2,559 thousand HKD, primarily due to fewer loans disbursed, with the Group maintaining a cautious approach - Interest income from the money lending business was 2,559 thousand HKD, a year-on-year decrease of 49.95%, mainly due to fewer loans disbursed during the period[114][118] - The Group conducts its money lending business in Hong Kong through its wholly-owned subsidiary, Billion Finance Limited, which holds a money lender's license[114][118] Assets Investments Business The asset investment business recorded fair value losses on financial assets at fair value through profit or loss and other comprehensive income, alongside a loss from the disposal of an associate - Financial assets at fair value through profit or loss recorded a fair value loss of 2,819 thousand HKD, primarily due to a decrease in the fair value of listed equity securities[115][119] - Financial assets at fair value through other comprehensive income recorded a fair value loss of 2 thousand HKD, mainly due to a decrease in the fair value of unlisted equity securities[115][119] - In January 2025, the Group disposed of an associate (EFL held a 48.33% equity interest) for 6,025 thousand HKD, recording a loss of 2,509 thousand HKD[116][119] Prospects of the Group's significant investments in associate The Group's 5.1% investment in Luck Key Investment Limited, engaged in medical diagnostic services, saw revenue growth but a loss attributable to shareholders - The Group holds approximately 48.33% equity interest in Luck Key Investment Limited, with an investment cost of approximately 56,511 thousand HKD and a carrying value of approximately 17,830 thousand HKD, representing 5.1% of the Group's total assets[120][122] Luck Key Investment Limited Performance (For the six months ended June 30) | Indicator | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Revenue | 98,630 | 94,879 | | Loss attributable to shareholders | (10,576) | (19,821) | - The Luck Key Group primarily engages in medical diagnostic and health check services, operating ten health check centres and two laboratories in Hong Kong[121][123] PROSPECTS The global economic outlook faces significant downside risks from geopolitical tensions and trade fragmentation, prompting the Group to focus on leveraging its strengths to develop existing businesses - The global economic outlook faces downside risks dominated by geopolitical tensions, trade fragmentation, economic turmoil, the Russia-Ukraine war, the Israel-Hamas conflict, and tariff wars[127][131] - The Group will continue to formulate and implement business plans and strategies, leveraging its business model, competitiveness, and strengths to develop, maintain, and strengthen existing businesses to create shareholder value and investment returns[128][131] FINANCIAL RESOURCES AND LIQUIDITY As of June 30, 2025, total assets decreased, cash and cash equivalents significantly reduced, and borrowings remained substantial, leading to increased gearing and net debt to equity ratios Financial Resources and Liquidity Key Data (As of June 30) | Indicator | 2025 (thousand HKD) | 2024 (thousand HKD) | Change | | :--- | :--- | :--- | :--- | | Total assets | 351,619 | 369,409 | -4.81% | | Cash and cash equivalents | 1,812 | 10,987 | -83.50% | | Borrowings repayable within one year (or on demand) | 97,761 | 95,546 | +2.32% | | Total borrowings | 102,388 | 103,091 | -0.68% | | Average annual interest rate | 7.6% | 8.3% | -0.7% | | Gearing ratio | 0.41 times | 0.40 times | +0.01 | | Net debt to equity ratio | 0.64 times | 0.56 times | +0.08 | - Cash and cash equivalents significantly decreased by 83.5%, with approximately 77% denominated in Australian Dollars and 20% in Hong Kong Dollars[32][132][134] - The Group's gearing ratio and net debt to equity ratio both increased, indicating a slight increase in leverage[133][135] CAPITAL STRUCTURE As of June 30, 2025, shareholders' equity was 207,426 thousand HKD, with total borrowings of 102,388 thousand HKD, a significant portion due within one year, and some loans subject to immediate repayment clauses - As of June 30, 2025, the Group's shareholders' equity was 207,426 thousand HKD[136][138] Borrowing Structure and Interest Rates (As of June 30) | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Fixed-rate borrowings | 25,164 | 30,740 | | Floating-rate borrowings | 77,224 | 72,351 | | Total borrowings | 102,388 | 103,091 | | Secured borrowings | 77,378 | 72,567 | | Unsecured borrowings | 25,010 | 30,524 | | Repayable within one year or on demand | 97,761 | 95,546 | | Repayable in the second year | 4,627 | 7,545 | | Average effective interest rate | | | | Fixed-rate | 9.7% | 10.6% | | Floating-rate | 6.9% | 7.3% | - Certain loan agreements contain clauses allowing lenders to demand immediate repayment at any time, regardless of the Group's compliance with covenants[137][138] OTHER FINANCIAL INFORMATION This section covers foreign exchange risk management, asset pledges for borrowings, and capital commitments, noting no derivative hedging, pledged assets of 79,557 thousand HKD, and no significant capital commitments - The Group's major revenue and costs are denominated in Hong Kong Dollars and Australian Dollars, and no derivative products were invested for hedging during the reporting period[144][147] - As of June 30, 2025, certain of the Group's borrowing facilities were secured by freehold land, buildings, and motor vehicles with a carrying value of approximately 79,557 thousand HKD[145][148] - As of June 30, 2025, the Group had no significant capital commitments contracted but not provided for[146][149] LEGAL AND COMPLIANCE MATTERS This section covers the Company's listed securities transactions, significant legal proceedings (Convoy and Chu lawsuits), and contingent liabilities, with no listed securities transactions and an inability to reliably assess potential liabilities from lawsuits PURCHASE, SALE OR REDEMPTION OF THE COMPANY'S LISTED SECURITIES Neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the six months ended June 30, 2025 - During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[150][152] LITIGATION AND CLAIMS The Group is involved in two significant lawsuits, the Convoy and Chu lawsuits, concerning share allocations, financial arrangements, and share dilution, with potential liabilities currently unassessable - The Group is involved in the Convoy Litigation initiated by Convoy Global Holdings Limited, seeking to rescind Convoy share allotments, void financial arrangements, and claim damages[151][153][154][157] - The Group is involved in the Chu Litigation initiated by Ms. Chu Hiu Yin, seeking to declare the placement of Convoy shares invalid and claim damages for share dilution[160][162] - The Group has sought legal advice and believes that the potential liabilities from these legal proceedings cannot be reliably estimated at present, and thus no provision has been made[164][169][173] CONTINGENT LIABILITIES As of June 30, 2025, the Group had no significant contingent liabilities other than those disclosed in the litigation and claims section - As of June 30, 2025, the Group had no other significant contingent liabilities apart from the disclosed litigation[165][170] HUMAN RESOURCES AND CORPORATE GOVERNANCE This section details the Group's employee remuneration policies, directors' and chief executive's interests, substantial shareholders' interests, convertible loan issuance, share option scheme, director information changes, competing business interests, securities transaction code, and audit committee operations EMPLOYEES' REMUNERATION POLICIES The Group employed approximately 140 staff with total staff costs of 20,389 thousand HKD, focusing on employee development and market-based remuneration Employee Count and Costs (As of June 30) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Number of employees | 140 | 119 | | Staff costs (thousand HKD) | 20,389 | 19,831 | - The Group actively provides career development opportunities for its employees through adequate and regular training to enhance their capabilities[167][171] - Directors' remuneration is determined by the Board based on the recommendations of the Remuneration Committee, considering their expertise, qualifications, and abilities[174][179] DIRECTORS' AND CHIEF EXECUTIVE'S INTERESTS AND SHORT POSITIONS IN THE SHARES, UNDERLYING SHARES AND DEBENTURES OF THE COMPANY As of June 30, 2025, no directors or the chief executive held any disclosable interests or short positions in the Company's shares, underlying shares, or debentures - As of June 30, 2025, none of the Company's directors or chief executive had any disclosable interests or short positions in the shares, underlying shares, and debentures of the Company[178][182] SUBSTANTIAL SHAREHOLDERS' INTERESTS As of June 30, 2025, Mr. Ng Ting Kit and his wholly-owned Deep Shine Holdings Limited were substantial shareholders, holding 9.64% and 5.06% long positions respectively Substantial Shareholders' Shareholdings (As of June 30) | Shareholder Name/Entity | Capacity | Number of Shares Involved | Approximate Percentage | | :--- | :--- | :--- | :--- | | Mr. Ng Ting Kit | Beneficial owner | 497,180,000 | 9.64% | | Mr. Ng Ting Kit | Interest in controlled corporation | 260,800,000 | 5.06% | | Deep Shine Holdings Limited | Beneficial owner | 260,800,000 | 5.06% | - Mr. Ng Ting Kit indirectly holds shares in the Company through his wholly-owned Deep Shine Holdings Limited[185] ISSUE OF CONVERTIBLE LOANS EFL issued convertible loan notes totaling 7,600 thousand HKD in 2021 and 2022, which were partially repaid and subsequently reclassified as other borrowings due to significant amendments - EFL issued convertible loan notes totaling 7,600 thousand HKD in December 2021 and January 2022, intended for the Group's general working capital[187][190] - In 2024, approximately 694 thousand HKD of convertible notes were repaid, and the remaining portion was reclassified as other borrowings and derecognised due to significant amendments (extension of maturity date to March 31, 2026, and lapse of conversion option)[189][191] SHARE OPTION SCHEME DETAILS The share option scheme, designed for talent retention and incentive, allows for options up to 1% of issued shares per participant, with no options granted during the period - The share option scheme aims to incentivise and reward eligible participants, and to recruit and retain high-calibre employees[192][196] - The maximum number of shares that may be granted to any one participant in any 12-month period shall not exceed 1% of the total number of issued and issuable shares at that time[193][197] - As of June 30, 2025, the number of options that could be granted under the existing scheme limit was 533,623,510 shares (approximately 10.35% of the issued share capital), but no options were granted during the reporting period[199][206] CHANGES IN INFORMATION OF DIRECTORS AND COMPETING BUSINESS INTERESTS Independent Non-executive Director Mr. Tong Hin Sum transitioned to a Non-executive Director role at another company, and Non-executive Director Mr. Ng Ting Ho holds directorships in competing money lending businesses - Independent Non-executive Director Mr. Tong Hin Sum was re-designated as a Non-executive Director of Profit Point Holdings Limited with effect from June 30, 2025[202][207] - Non-executive Director Mr. Ng Ting Ho holds directorships in other companies engaged in money lending businesses, which may compete with the Group's business[204][208] CORPORATE GOVERNANCE The Company adheres to a code for directors' securities transactions and corporate governance practices, with the Audit Committee reviewing interim results, despite the Chairman and CEO roles not being segregated - The Company has adopted a code of conduct regarding securities transactions by directors and has confirmed with all directors their compliance with the required standards of dealing during the reporting period[209][213] - The Company complies with the Corporate Governance Code, but the roles of Chairman and Chief Executive are not segregated, and the Chief Executive position has been vacant since January 1, 2025[211][214] - The Audit Committee, comprising three independent non-executive directors, has reviewed the interim results report and found it to be in compliance with applicable accounting standards and the GEM Listing Rules[217][218][219]